Published On: Mon, Feb 26th, 2018

Allergen, the Mohawk Indian Tribe and What Is the Connection to Teva

The CEO of Allergen tried to transfer ownership of the company's patents to Mohawk Indian tribe that enjoys legal immunity - but the court ruled that the patents on Restasis were not valid. 

 

The creative attempt by the drug company Allergan to fight generic competition by Mylan and Teva failed, and not for the first time.
The appeals committee of the US Patent Office on Friday rejected an application filed by the Mohawk Indian tribe of St. Regis, New York state, to reject outright the appeal of the generic companies Mylan, Teva and Akorn for the patents protecting the drug Restasis until 2024.

Restasis used to increase tear production in patients who have dry eyes due to eye inflammation.Although Restasis is an expensive drug, it is slightly more popular than comparable drugs. Currently, there are no generic alternatives for Restasis.

The three generic companies Teva, Mylan, and Akorn filed a patent dispute in mid-2017 in a brief proceeding before the US Patent Office.

This short procedure (Inter Partes) challenges the patent approval process and is based on the argument that the patent was given illegally. At the same time, the three companies appealed to the Texas court.

The US Patent Office hinted at a relatively early stage of the hearing that there was a basis for the generic companies’ claims that the Restasis patent should not have been granted in the first place.

Allergan worked hard in recent years to protect Restasis, from generic rivals. The company’s second-largest product after Botox, generated about $1.5 billion in sales in 2016,

 

Allergen announced in early September 2017 a controversial agreement signed with a Native American Mohawk tribe, according to which all patents on the drug Restasis will be transferred from Allergan to the tribe.

Allergen paid the tribe $13.75 million for its willingness to participate in the process, and royalties of $15 million a year from sales of the drug until the expiration of the patents protecting it.

In return for the generous payments, Allergan was supposed to receive from Mohawk tribe, a real asset: legal immunity.

Generally speaking, Native American tribes enjoy immunity from suit—infederal, state, or tribal courts, is the legacy of British law.

Allergan hoped that the legal immunity of the Mohawk would mean that the decisions of the Patent Office would not apply to the patents on Restasis, which began on September 8, 2017, as the property of the Mohawks.

Brenton Saunders, CEO of Allergan, was based on a precedent set in mid-2017 by the patent office itself when it rejected a lawsuit filed by medical equipment giant Covidien, against the University of Florida Research Institute on the basis of the immunity that stands alongside the University as an entity owned by the State of Florida.

Allergan’s legal move might have blocked a fast and efficient channel for generic companies to deny patent protection to companies that developed many drugs.

However, the US Patent Office ruled last Friday that it had the authority to discuss whether the patent examiners acted properly when they granted the patent, regardless of who owned the patent.

The decision was made after a federal court in the US ruled that the patents on Restasis were invalid.

The court’s decision is a small legal victory for Teva for Allergan, which sold it to Actavis for $39 billion – and entangled it in a war of survival.

 

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